1. Global growth fears continue to linger hitting risk appetite. As the US 10-year treasury yield inversion with the 3-month yield intensifies, investors are finding recession fears difficult to ignore.
2. One by one we are seeing central banks across the globe acknowledge the worsening economic outlook and move towards a more accommodative stance for monetary policy. This was highlighted today after the Reserve Bank of New Zealand stated that a rate cut was more likely than a rate rise and after Draghi doubled down on dovish rhetoric.
3. The ECB President added to growing concerns over the health of the eurozone economy, by reminding the markets that the risks were tilting to the downside. Draghi confirmed that the ECB were willing to delay any planned interest rate hikes if necessary, a move that mirrors the Fed. The euro dipped to a 2-week low of $1.1242.
4. Pound steady around the flatline amid Brexit nerves ahead of action in Westminster this afternoon. Theresa May is expected to give a date for stepping down as PM as the price for getting her twice defeated deal through Parliament.
5. Parliament will be voting on other alternatives to Brexit in an attempt to end the current impasse in Westminster. Ministers will vote on options such as keeping close ties with the EU or a second referendum. Minister have been instructed to vote for every option they support, in the hope of finding one that could hold a majority. Whilst the votes are not legally binding, Parliament could try to make it so in subsequent moves.
The pound was unable to maintain earlier strength and it is hovering around the flatline. At these levels pound traders continue to be optimistic that a no deal Brexit is a remote possibility.
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